Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Would we take a position that a set % of fees is considered investment counsel fees and the balance is management fees where the fees are for comprehensive services and nearly impossible to prorate?
Position:
No
Reasons:
Annuitant can only contract for advice.
972237
XXXXXXXXXX M.P. Sarazin
Attention: XXXXXXXXXX
October 2, 1997
Dear Sirs:
Re: Investment Counsel Fees
This is in reply to your letter dated August 20, 1997, wherein you requested further clarification with respect to the views expressed in our letter (file #971844) dated August 19, 1997 (the "Letter"), regarding fees relating to investments held in a registered retirement savings plan ("RRSP") or a registered retirement income fund ("RRIF"). In particular, you would like to know how to classify fees for comprehensive services which include investment counsel advice and management services.
In the Letter, we have already provided you with our general views in respect of fees, relating to investments held by an RRSP or RRIF, for investment counsel advice and management services provided to the RRSP or RRIF. It is clear that the costs contracted for by an annuitant to carry out his or her responsibilities relating to a self-directed RRSP or RRIF are expenses of the annuitant. This would generally be restricted to the cost of advice on investing where, under the terms of the RRSP or RRIF, the annuitant is responsible for providing the trustee with investment decisions. We would also note that an annuitant cannot contract for fees that relate to the management of the RRSP or RRIF property because the annuitant does not own the particular property. If there is only one contract and it is for the provision of investing advice and all of the management related services, we would generally consider such costs to be costs of the RRSP or RRIF and not costs of the particular annuitant.
We trust the above comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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